Before City claimed a 4-1 win over Hull today in the Capital One Cup, City Football Group announced that China Media Capital (CMC) and investment company Citic Capital have purchased a 13% stake (£265 million) in the company. This values CFG at around $3 billion (£2 billion), an astounding number. The move will also install Ruigang Li, the founder and chair of both firms, as the seventh board member of CFG.
Another smart commercial deal conducted by CFG, the announcement comes after a reported 6 months of planning and negotiating, as well as a visit from the Chinese President, Xi Jinping, to the City Footballing Academy in October. It is intended to further the CFG brand into one of the world's largest markets, where only Real Madrid have a significant presence at the moment. The idea is to spread CFG opportunities through the right doors guided by CMC for commercial and marketing purposes. CMC is already involved in sports production and marketing throughout China, including exclusive media rights in the Chinese national team and Chinese Super League.
Though this will provide a boost for MCFC as well as Melbourne City and New York City FC, it will likely be the biggest boon for Manchester City as the global name of the bunch. As has already happened in Abu Dhabi, rapid expansion into the region is very possible with the right partners. City should see a healthy increase to commercial revenue over the next few years thanks to this deal. Through this deal, it is reported that City are now worth about 10 times the price that Sheikh Mansour paid for the club back in 2008. A remarkable achievement in a short space of time.
As far as footballing interests go, China would make sense as a region to install another satellite football academy and further the CFG scouting network across the globe. It has been a largely untapped market and region for some time. Combining this with CFG's minority stake in Yokohama F Marinos, CFG are clearly setting up shop in that corner of the globe.
The official press release from the City website can be read here.
Thoughts on the deal? It will be interesting to see how this shapes City's financial future.